Good morning and welcome to ModivCare's third quarter 2024 financial results conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation, at which time you'll press star one to ask a question. Please note this conference call is being recorded. I will now turn the call over to Kevin Ellich, Head of Investor Relations. Mr. Ellich, you may now begin. Good morning, and thank you for joining ModivCare's third quarter 2024 earnings conference call and webcast. Joining me today is Heath Sampson, ModivCare's President and Chief Executive Officer, and Barbara Gutierrez, ModivCare's Chief Financial Officer. Before we get started, I want to remind everyone that during today's call, management will make forward-looking statements under the Private Securities Litigation Reform Act. These statements involve risks, uncertainties, and other factors that may cause actual results or events to differ materially from expectations. Information regarding these factors is contained in today's press release and in the company's filings with the SEC. We will also discuss non-GAAP financial measures to provide additional information to investors. A definition of these non-GAAP financial measures and the applicable reconciliations to their most directly comparable GAAP financial measures is included in our press release and Form 8-K. A replay of this conference call will be available approximately one hour after today's call concludes and will be posted on our website, modivcare.com. This morning, Heath Sampson will begin with opening remarks. Barbara Gutierrez will review our financial results and guidance. Then we'll open the call for questions. With that, I'll turn the call over to Heath. Good morning, and thank you for joining our third quarter 2024 earnings call. This quarter has shown positive momentum, reflecting both operational enhancements and strengthened relationships, even amid broad healthcare market shifts. Third quarter results were in line with our expectations, with Adjusted EBITDA of $43 million and revenue of $702 million. These results were driven by continued improvements in our personal care services segment, higher margins in remote patient monitoring, and NEMT cost savings. We have made strides in optimizing technology to enhance processes, automating several contact center and back office functions to improve our cost structure and reducing our NEMT unit costs through our multimodal network strategy initiative. During the quarter, we were successful in getting an amendment to our credit agreement, giving us temporary relief with our debt covenants. Our bank group continues to be constructive and supportive, and we are working with them to finalize a long-term solution that provides us with the time needed to thoughtfully and strategically assess the best approach to optimize value for all stakeholders. Over the last several quarters, we have been actively working to reset several of our shared risk NEMT contracts through retrospective upfront prepayment increases. While these adjustments are a standard part of our annual resets, the impact of Medicaid redetermination and increased healthcare utilization created delays in increasing AR accruals. As a reminder, our contracts, payables, and our receivables accrue each quarter. They increase or decrease over 6-12-month reconciliation periods and subsequently settle over the next quarter. In the third quarter, we were able to collect gross contract receivable amounts of $105 million, including $42 million from retrospective prepayment resets, and $39 million from an early settlement with our largest MCO client. Furthermore, our negotiations with clients to date have successfully reduced our contract's receivable bill by 40% on a go-forward basis through increased upfront payments. We are working to address our remaining shared risk contracts through further prepayment updates and, in many cases, shifting to fee-for-service arrangements, which will have monthly and quarterly payments. Our working capital and related free cash flow will continue to normalize over the next two to three quarters as these activities are completed and we work through the runoff from current payables and receivables. We had a contract receivable balance of $110 million as of September 30th, of which approximately 70% is contractually due to us by the end of the second quarter of 2025. This excludes any future receivables bill. Regarding our contract payables, we expect to settle or repay substantially all of the existing payables balance, which was $47 million, by the end of the second quarter of 2025. Additionally, we anticipate the billed and receivables over the next two quarters will also be settled in mid-2025 as the contracts complete and we transition to new fee-for-service contracts. Shifting to our guidance. In mid-September, we lowered our 2024 Adjusted EBITDA guidance to a range of $170-$180 million, primarily due to some repricing in our NEMT segment that were agreed to strategically retain or expand key customer relationships. We have ongoing discussions that could have a material positive or negative impact in 2024 financial results within the range we provided. Thus, we are not adjusting our guidance. We expect 2025 Adjusted EBITDA to increase approximately 10%, driven by membership growth and new contract wins, as well as cost savings and other strategic initiatives. Our transformation across all segments has created a foundation for stability with technology, clinical capabilities, and customer engagement differentiations at scale. This positions us for sustainable growth, enhancing the near-term and long-term value for our business. We will provide more information regarding our 2025 outlook when we report fourth quarter and full year 2024 results, which is our normal cadence for providing more detail. Over the past 18 months, the government-funded healthcare arena has faced several headwinds from material regulations, rising costs, a strained workforce, and a growing chronic population. Our MCO clients, especially Managed Medicaid, have been dealing with a number of issues, including Medicaid redetermination and the normalization of utilization. The Berkeley Research Group projects MA medical costs will increase 4%-6% in 2025. As a result of lower rates and higher costs, our MA MCO clients have exited several unprofitable geographies and reduced supplemental benefit spent on transportation and other supportive care services. As a reminder, Medicare Advantage accounts for about 15% of our NEMT revenue and 25% of our RPM revenue. We anticipate a shift of our MA mix to winners from losers as a result of potential changes. We are focusing on our sales and product strategy around these shifts, listening to our clients and developing MA products in response to the expected shifts in the market. In 2025, we do anticipate a contraction of our Medicare Advantage business. As our clients' MA membership firms up, this will be reflected in our 2025 budget with more details to follow on our next earnings call. Once we get beyond these changes, our supportive care services are well positioned to benefit from the tailwinds in MA and its focus in 2027 to integrating dually eligible members, health equity, and SDOH measures. From an operational perspective, the NEMT segment continues to perform well, with high on-time performance, low missed trips, and historically low complaints. Our team has driven efficiencies through automation and optimizing the latest technologies, which has driven significant efficiencies and cost savings. In the third quarter, we realized $3 million of net cost savings driven primarily by our strategic initiatives in our NEMT segment. Since we started these initiatives in mid-2023, we have made major strides enhancing our technology capabilities by implementing new contracts in our technologies, enhancing the member experience, and more capabilities to provide assistance while also driving cost savings, evident by lower payroll and other expense per trip, which is down approximately 25% over the last 18 months. Additionally, we have gained operating leverage through our multimodal strategy, reducing unit cost or purchase service expense per trip, even in the face of rising utilization, while ensuring members are assigned the most medically appropriate level of service for their needs. While we have made significant progress to optimize our cost structure, we believe there is more opportunity and expect additional cost savings will be realized over the next 12 months. During the third quarter, we won $12 million of NEMT annual contract value, or ACV, and have added $81 million year to date. We have successfully renewed or extended all the state NEMT contracts this year. Our NEMT pipeline remains strong with $1.5 billion of ACV. Our multi-pronged go-to-market strategy is positioning us for growth, not only with existing clients, but also with new clients who were previously disillusioned in 2019 to 2022. We've come a long way with tangible tech-enabled and, when appropriate, high-touch performance. This year, we have successfully renewed, retained, and extended state NEMT contracts and have a significant opportunity over the next five years as our new and expansion contract pipeline is valued at $1.7 billion. We are also seeing a shift in client retention as certain clients who previously moved to competitors focused on pricing or simplified solutions are now experiencing performance and cost issues. Our commitment to sustainable partnership positions us well, and we are in close contact with these clients, expecting to win back their business in 2025 as they prioritize quality, member satisfaction, and cost stability. In our personal care services segment, we're making progress growing ours. We have successfully executed a transformation, building upon a unique platform with standardized technology, operational, and compliance excellence. Our focus is to continuously optimize, aligning our hiring with business development to accelerate the right referrals at the right time, therefore improving top-line growth. We anticipate further operational efficiencies and margin improvement over time, reinforcing the strength of our transform platform. Now, I'd like to provide an update on New York's Consumer Directed Personal Assistance Program, known as CDPAP. The state selected a single vendor as the exclusive administrator for New York CDPAP. PPL plans to have four large regional contractors and 30 subcontractors that will work with them in New York, and we have one of the 30. This is a dramatic shift from today's 700+ Fiscal Intermediaries. While this change is slated to go into effect on April 1st of 2025, many industry stakeholders, including legislators and one of the large regional subcontractors, have voiced concern that the timeline is too aggressive and unviable. We expect this transition to be further delayed. There remains a lot of challenges with the state's new approach to CDPAP. However, we have been operating in the New York market for decades and in several counties, and we expect to continue to be an experienced market leader. In 2024, reimbursement rates increased in two of our largest states, New York and New Jersey. Subsequent to the end of the third quarter, West Virginia saw a meaningful rate increase, and we continue to advocate at the state and local level among our peers. Our largest state, Pennsylvania, hasn't had a rate increase in over four years. Recently, the state requested public participation for a rate study, which could be a precursor to a potential rate increase that would be very meaningful for our PCS segment. Moving on to our RPM or monitoring segment. Revenue increased 2% sequentially, and adjusted EBITDA margin was nearly 37% due to a concerted effort to manage cost. While top-line growth is still lower than historical growth rates, primarily due to attrition within our MA portfolio, we expect growth will continue to improve over the coming quarters, driven by new business wins and operating leverage. That being said, we expect the headwinds to continue in 2025 for MA supplemental benefits within PERS. As the premier PERS provider in the Medicaid long-term services market, our stable, recurring revenue averages around five years per member, creating a stacking effect on long-term growth. Our unique technology-driven clinical monitoring solution is also gaining traction. We've effectively balanced low-cost continuous monitoring with targeted clinical oversight. Results from early pilot programs have been very encouraging, delivering significant value through innovation. Combined with our Medicaid business, long-term growth, and robust margins, this positions us for sustained success. In summary, we've clearly made meaningful strides in taking out costs and driving efficiency in all parts of our business, especially NEMT. The centralization and standardization in our personal care services segment is nearly done, and leading indicators are showing continued margin improvement over the next few quarters. We have gone through an unprecedented time with the impact of Medicaid redetermination, which has created greater-than-expected volatility in the timing of our working capital normalization and cash flow generation. We believe there is considerable underlying value in our three segments. As previously stated, delivering our balance sheet is a top priority. In the meantime, discussions with our bank group have been productive, and we expect to have a long-term collaborative solution completed in the near term. Once this is done, we have a number of levers that we can pull to enhance stakeholder value. We are considering all options, but we will be strategic and thoughtful about which path we take to ensure we drive the best outcome for all our stakeholders. I'd like to thank all our teammates at ModivCare for their hard work and dedication, providing high-quality services to all our members and clients. Now, I'll pass the call over to Barb, who will share additional details about our financial results and outlook for 2024. Barb? Thank you, Heath, and good morning, everyone. Third quarter 2024 revenue increased 2% year over year to $702 million, driven by 5% PCS growth and 1% NEMT growth. Third quarter net loss was approximately $27 million, and adjusted net income was $6 million, or $0.45 per diluted share. Third quarter Adjusted EBITDA was $43 million, or 6.2% of revenue, driven by solid performance in our RPM and PCS segments, as well as continued operational improvements and cost savings in NEMT. Turning to a review of our segment financials, NEMT's third quarter revenue increased 1% year over year and was relatively flat sequentially at $492 million. NEMT revenue benefited from the onboarding of new contracts and contract reconciliations, offset by slightly lower revenue per member. Average monthly membership increased about 1% sequentially to $30 million due to the onboarding of previously announced contract wins, while trip volume increased 4%, leading to a 34 basis point increase in utilization to 10.48%, which was in line with our expectations. Revenue per trip decreased 3.8% sequentially due to trip mix. On a sequential basis, NEMT gross margin decreased approximately 150 basis points to 11.3%, primarily due to growth in trips as well as trip mix, which was partially offset by our cost-saving initiatives, resulting in reduced service expense per trip of 2%. Purchase services expense per trip decreased 1% quarter over quarter to $30.75, driven by our multimodal initiatives. Payroll and other expense per trip decreased 9% sequentially to $5.60, which included a one-time benefit in salaries and wages. Payroll and other expense per trip, excluding the one-time benefit, remains lower sequentially and year over year, and we expect the trend to continue in the right direction. NEMT adjusted EBITDA was approximately $31 million, and NEMT margin decreased 99 basis points sequentially to 6.2%, driven by higher utilization, trip mix, and higher G&A. During the third quarter, Medicaid redeterminations impacted our NEMT membership by approximately 220,000 members and adjusted EBITDA by less than $1 million, which was modestly higher than we anticipated as some of our larger states saw a greater-than-expected impact in the quarter. Overall, redeterminations have trended in line with our expectations, and we anticipate a minimal impact on our Medicaid membership for the remainder of the year. Turning to our Personal Care Services segment, third quarter Personal Care revenue increased 5% year over year to approximately $189 million, driven by 3% growth in hours and 2% growth in revenue per hour. As a reminder, we received reimbursement rate increases from New York and New Jersey this year, and we also received a meaningful rate increase from West Virginia subsequent to the end of the quarter. Personal Care Adjusted EBITDA was approximately $16 million, or 8.3% of revenue, which was a modest improvement from the second quarter, driven primarily by lower adjusted G&A expense and slightly lower service expense per hour. We continue to expect additional margin improvement in the fourth quarter, driven by our efforts to drive operational efficiencies and reduce costs. RPM revenue decreased approximately 2% year over year and increased 2% sequentially to $19 million after higher-than-normal contract churn in the first half of the year. RPM Adjusted EBITDA was $7.1 million, or a 37% margin, driven by aligned service expense and mix compared to the previous quarter. We anticipate some headwinds from MA supplemental benefit changes going forward, but with expected new client onboarding and continued focus on cost management, RPM margins should remain in the mid-30% range going forward. Turning to our balance sheet and cash flow. During the third quarter, free cash flow was $1.5 million, consisting of net cash provided by operating activities of approximately $9.3 million and capital expenditures of $7.7 million. We ended the quarter in a net contract receivables position of approximately $63 million, down from a net contract receivables position of $79 million at the end of Q2. On a net basis, contract receivables decreased by $55 million sequentially to $110 million, primarily due to successful collection of pricing resets and reconciliations during the quarter. Net contract payables decreased by $40 million quarter over quarter to $47 million. This decrease was due to reconciliation and settlement on certain contracts that were expected in the third quarter. Over the last several quarters, we have successfully renegotiated a number of our shared risk contracts to increase the upfront prepayment amounts and, in some cases, accelerate contract receivable settlements otherwise due in subsequent quarters. As a result of the prepayment resets, we have been able to reduce our recent quarterly gross contract receivables build rate by 40% on a go-forward basis and improve our upfront cash flow conversion. In the third quarter, we collected $105 million of gross contract receivables, including $42 million from retrospective prepayment resets and $39 million from early settlements. While we had a net inflow of $16 million from our contract receivables and payables, other working capital fluctuations, including $25 million of debt refinancing costs, led to a $45 million increase in our revolving credit facility, which had a balance of $228 million as of September 30. At the end of the third quarter, we proactively amended our credit agreement to increase the total net leverage ratio covenant for September 30, 2024, to 6.5x from 5.25x and reduced the minimum interest coverage ratio covenant to 2.0x from 2.5x. As of September 30, 2024, we had approximately $1.2 billion of debt, and our bank-defined net leverage ratio was 5.6x. We are still in discussions with our bank group for a long-term relief amendment to ensure continued compliance and will provide an update once complete. We ended the third quarter with $48 million in cash. As a reminder, we make our semi-annual interest payment on our 2029 senior unsecured notes in the second and fourth quarters. The first interest payment on our new term loan facility was due on October 1, which will be due at each quarter end going forward. Turning to 2024 guidance, we maintained our 2024 revenue guidance in a range of $2.7-$2.9 billion and our Adjusted EBITDA guidance in a range of $170-$180 million. Here are a few qualitative and quantitative items for you to consider for the remainder of 2024. Medicaid redetermination continues to track in line to slightly better than our original expectations, and we anticipate a minimal impact for the remainder of the year. We expect a positive contribution from contract mix and utilization, which consists of: one) membership from net new contract wins, two) trip volume mix, and three) contract repricings. We have achieved our cost savings target for the year with year-to-date savings of $40 million. For the remainder of the year, we expect to achieve further modest net cost savings driven by our strategic initiatives in NEMT. We anticipate continued contribution and growth from PCS and RPM, as well as our business development activities, which is expected to have a positive impact on membership and trip volume mix. We will provide more details regarding our 2025 outlook when we report fourth quarter and full year 2024 results, which is our normal cadence for providing full year guidance. In summary, our third quarter financial results were in line with our expectations. We were pleased with the significant collections of our contract receivables and continue efforts to work with our payers to tighten reconciliation periods on a go-forward basis. We continue to focus on maximizing value in each of our operating segments through growth and operating cost efficiencies. In the near term, we are concentrating on completing the long-term amendment on our credit facility to provide us flexibility and runway as we work on our top priority to delever our balance sheet. I would like to thank all of our teammates across the organization for their hard work and dedication. Your efforts are greatly appreciated as we continue serving our members and clients. Operator, please open the call for questions. Thank you. Ladies and gentlemen, the floor is now open for questions. If you do have a question, please press star one on your telephone keypad at this time. Again, that's star one if you have a question or comment. Please hold as we poll for questions. And we'll take our first question from Brian Tanquilut from Jefferies. Please go ahead, Brian. Hey, good morning, guys. Hey, good morning. Good morning. So first question, as I listened to your comments and prepared remarks on this fee-for-service shift, it seems to be part of the new strategy. Maybe if you can just talk to us about, number one, the why. Is that reflective of the expectation that utilization will remain elevated? And then two, maybe just the margin implications. And then three, is this something that you expect state plans to agree to as well, or is this limited to Managed Medicaid? Yeah, I'll start from your last question. So the state Medicaid, the contracts will likely remain full risk. We're seeing that. And so I don't expect those to move from where they are. And again, we've seen our renewals in that space, and those continue to be at the full risk side of things, which is, again, 40% of our revenue. And then the shared risk is definitely where you'll see the change. And this is a change that we are supportive of and pushing towards to ensure that we can get paid on a monthly basis or a quarterly basis. And if you just do the math on the cost of capital, it makes a ton of sense to do that. And then, because there is price compression that happens on that. So again, that far outweighs the price compression that we're seeing. In addition to the price compression, the efficiency that we're gaining in the system, in the model, especially when we have scale, is a really competitive advantage to ensure that we can compete on that price and not feel the compression that happens. So the math makes sense. The model and the initiatives that we did have acted on and continue to act on really give us a competitive advantage. But you will see the price compression happen, and again, as expected, and we want that because of the timing of the cash flow. Got it. Okay. And then maybe since you mentioned cash flow, I appreciate all the detail on the moving pieces between AP and AR, but as I think about back half or mid-2025, how should we be thinking about where the cash position or net AR versus AP position? What would that look like? And then what are you seeing in terms of new receivables coming in as you amend these contracts? We're hearing some delays in other areas of healthcare in terms of payments. So just curious what you're seeing there and what your expectations are. Yeah. So we couldn't be more proud of the team and actually the partnership with all our clients out there to get through this. The healthcare industry and specifically our clients that we're managing on the shared risk side with redetermination coupled with higher utilization, the costs were higher than a lot of them expected. That was painful, which is why these last couple of quarters we've been disclosing these items. That was the 2023 cycle as well as 2024 because, again, most of these contracts, especially in a weighted perspective, are 12 months, and then you have a quarter after that of reconciliation. We're through that tough period, which is why we gave so much disclosure on how much we have collected and where we are, but we still have the 2024 contracts to roll off. That's why we've given that and why we've given the information around mid-2025. We have a lot of clarity around the timing and the amounts because we're through that. We do have to roll off these shared risk contracts through 2024, and that will take time through the middle of 2025. And a lot of those contracts as well in the middle part or early part of next year will be switched to that fee-for-service as well. But again, we got to roll off the remaining 2024 contracts that are shared risk. All right. Got it. Thank you. Thank you. Thank you. And we'll take our next question from Pito Chickering from Deutsche Bank. Please go ahead, Pito. Hey, good morning, guys. Can you start off with any interest on the sale of Matrix or divisions and how the timing of that looks like? Thank you. Yeah. So Pito, consistent with what we've been talking about for the last couple of quarters, and again, that we are looking at each of our individual businesses to ensure that they are performing, operating at scale, have kind of consistent cash flows because they do all CapEx light. And the transformation that we've gone has taken hold, and you can go across the board to ensure that we have a long-term margin profile and consistent cash flow that come from each of these segments. So that's been a top priority for us, and we are deliberately talking about the three of them separately. At the same time, we are evaluating those individually to see if they make sense to stay with us or they can be monetized and sold. So that dual-path strategy, preparing and doing, is what we've been doing, and we continue to do that. And we'll give more information when the time is right because we know, and this is important, that we deliver the balance sheet. We know the cost that we have and the optionality to do that at the right time, again, because we know where we are, we know we're performing, and we understand if there was a sale, what's the best timing, what's the best dollar amounts, and we're prepared for all those scenarios, and we understand that's a critical part of our strategy going forward. To do with Matrix, same. Matrix has done a wonderful job over the last 18 months to ensure they have a competitive advantage. Again, their main advantage is having these 2,000-plus nurse practitioners that can do more in the home and catch the tailwind of where healthcare is going into the home. We've made significant, or the team has made significant progress to have competitive advantages to ensure that we can match the nurse to the timing and the member, taking the friction out of that system, and they've done a lot of that. That timing on when we monetize that mainly has to do with the MA tailwinds, sorry, headwinds that have been in the marketplace. TBD, we're alig ned with Frazier. The most important thing is to continue to execute, and we'll monetize when it makes the most sense. Great. Following up on Brian's question around moving, again, the MT to fee-for-service, you sort of talked about price compression as managed care payers quicker payments in return for lower prices. Historically, the PMPM model was remote. How do you defend against these sort of managed care payers using other ridesharing apps if you just move into fee-for-service? And are you seeing other competitors willing to keep with a full-risk model? And is there a risk for market share losses? Yeah. So the full-risk model, primarily in the state business, and those are large contracts. There really is only a couple of people now that can do that work, which is why you have seen the benefit of us continuing to extend that. So we feel really good about those, and those are at full-risk contracts, and they'll remain there, which are at the appropriate risk-adjusted margin, which is obviously higher. Where the margin compression is, again, is in that shared risk component. And really, from a shared risk component, what we've been getting paid over the last couple of years anyway has been lower. So moving to fee-for-service, again, the cost of capital far outweighs any additional margin compression that is happening. But where the competitors are, and this has been consistent, is in that individual, maybe there's a small part of a state plan. I mean, sorry, in a state where it's an MCO. It's primarily MCO, and it's primarily smaller sections that the competition has been. Rideshare is a critical component of our competition as well as us, and we have strong relationships and strong integration with them. However, that's only on a certain part of the population, and there's a big difference between MA and CAD and even state business, but I'll just stick with because we're close to this and we're close to our payers. Managing the benefit is very complicated. Having a higher level of service, as simple as being able to take somebody from door to door, is critically important to healthcare, let alone needing a wheelchair, let alone needing a stretcher. So those higher levels of service are really the most important components of ensuring cost is down and members get the appropriate medical care. That is complicated because people have different contracts, different payers have different ways, states are different. That managing the benefit is important. And the second other part, you need to have a high-touch model as well. High touch to ensure members can reach out as well as if there's an issue to intervene on that. The second item is, and this is what we do, you got to be connected to the rest of the healthcare ecosystem, integrating one into transportation providers, but two, into the facilities, whether that's a dialysis facility, is also critically important. And then secondly, as you can see things moving, if you look at the 2027 CMS requirements, which I think are really, really strong, ensuring that tools are managed more holistically. Right now, it's very complicated, and that requirement is what actually payers are looking for us now. How do we manage that diversity that needs to happen around these very different plan designs? So anyway, I really like what we have been doing and the technology we've been implementing, and a big part of our strength is to ensure that we manage the benefit and connect to the ecosystem. And we'll use rideshare appropriately for the right people at the right time, but there's many other modes. So anyway, there's a lot there. You need to be able to do that at scale in order to manage through the cost and have a competitive margin relative to the rest of the competition. Just a quick follow-up there. As you move directly into fee-for-service with the managed care partners, in some cases, you guys use rideshare. If you're going to straight fee-for-service, why don't they bypass you and just use rideshare themselves for some of the lower acuity patients? Thanks. Yeah. So the benefit needs to be managed by a broker in NEMT for Medicaid. Medicare, absolutely. I think Medicare, you can start using a card as well. So I do believe in Medicare, you'll see there's a lot in Medicare that will continue to be transformed over these next couple of years. We do believe we have a platform, and it is in partnership with rideshare to ensure we can deliver the best service. And it gets to, again, this is critical, and we're seeing this happen real-time. It's easy for somebody when they are elderly but not sick and in a metropolitan area. Rideshare works like a charm. But if you need anything else, it doesn't. And if you can't manage that friction, it's very expensive and you get a lot of issues. So I do think in MA, there'll be the right balance of rideshare and brokers. Medicaid, it's required. Medicaid, and I'm not going to repeat myself, it's really important to ensure that you're connected to this ecosystem and can manage the diversity of the benefit. Great. Thanks so much. Nice quarter. Thanks. Thank you. And we'll take our next question from Bob Labick from CJS Securities. Please go ahead, Bob. Good morning. Good morning. So you talked on a call a lot about the kind of evolution of your contract structure and the potential to improve reconciliation, be paid faster, all that kind of stuff. But can you set expectations? It sounds like we're still a few quarters away as we work through stuff. Maybe set expectations on working capital and free cash flow over the next three quarters. And then what free cash flow conversion should be once we get to the new structure you envision, please? Yeah, Bob. Hopefully, it was in the comments, and I'll kind of double down on. I think that the thing that I'm most positive on is the clarity we have and what the amounts are going to be and the timing's going to be. We didn't have that clarity two quarters ago or even a quarter ago because the industry was kind of flat-footed. And we were making assumptions on what we could settle early on or what we could get changes on. That noise is through the system. And every one of our clients, we understand where we are. And then we also understand where we are in the life cycle of these kind of last 2024 contracts. So the clarity around size and amounts is most important because that allows us to appropriately plan, which is why we're giving that guidance around mid-2025. So that's the number one most important point. But at the same time, because of that, we're not going to get to our free cash flow number until we're through this kind of change and settle up on the payables and receivables. So we should expect to be back in that in the latter half of 2025. And at this higher interest rate, like we talked about, that cash conversion rate of 30% is the right mode. But at the same time, to get into Peter's question earlier, an important part of us is to ensure that we are delivering because that's a top priority for us. And then when we are able to deliver, we know that cash conversion rate will be higher because a big driver for that is the high-interest expense we have. So clarity, consistency, alignment with our payers is something I'm proud of, and we'll manage through that and get through that and back to the right cash conversion rate in middle 2025. Okay. Great. That's helpful. And then you've said for several quarters now, everything's on the table and showing up the balance sheet. Is the long-term covenant relief contingent upon the sale of an asset, or what's the order of operations in terms of when we should learn more about long-term amendments and when we should learn about asset sales? Yeah. The asset sales are going to be when the time is right at the right value. And of course, it's connected to delivering and the cost of that. It's all understood. And of course, we have optionality on when we do that. But it's an important part to do that at the right time. That's a critical part of our strategy to do that at the right time. And then to do with the covenant relief, we do want a long-term solution. So all the stuff that I just talked about now, that's the stuff that we're working with our banking partners to ensure we understand all the different scenarios that are out there. They see the value. They see the eventual cash conversion. They see the benefits that we have in each of our assets at scale and our competitive advantages. We're just finalizing all that, getting the timing right. Truly, the contract waterfall, which ones are fee-for-service, which ones aren't. So we're just working through the details to ensure that we have completeness on a long-term data gathering to ensure that we get this done at the right long-term level. So we're in the middle of that, which is why we haven't given any more updates other than what we gave on the call. So we're really encouraged about it. They get to see a lot more than you all do, and that's why I'm really optimistic about us getting something done. Okay. Great. And last one for me. Obviously, you've discussed, and intuitively, it makes sense to have the faster cash cycle, even if you do give up a little pricing based on the cost of capital. But can you talk about kind of where you are in the NEMT infrastructure and the ability to manage your cost per ride and then still grow margins even under the kind of new contract structure? So what we started over 12 months ago, both on the purchase services, which is the different modes of transportation, and then with the, call it, back office, which is the administration, which includes contact center as well as just the routing component. We have made a lot of progress across all those. You can see it in our data. We've never had purchased services margin come down since I've been here, and you've seen that consistently happening, and I do believe there is a lot more in there, and that will continue to happen with the initiatives that we have in place. Same with payroll and other. It really is this digital adoption that has been happening, and then kind of this part of that is taking the inefficiency out of changes in transportation, and for us, at scale, that is a complicated thing because contracts are very different, but we are doing a really good job at that as well, so with the initiatives that we have put in place, we've seen that happen. You've seen the improvements. I expect those improvements to continue throughout 2025. And then again, when we have scale and can manage the diversity of the benefit across all our payers, we'll be in a great place to have the lowest cost structure as well as being able to manage the complexity. So we do need to continue to execute, but that's why we're doing it. And I feel good about our ability to get to the right margins because of all the cost out that we've put in place. Got it. Okay. Thank you. Thank you. And we'll take our next question from Scott Fidel from Stephens. Please go ahead, Scott. Thanks. Good morning. First question, just hoping to get two numbers from you. The first would be what you think the revenue headwind in RPM as a percentage of revs will be from the MA reductions and sub-benefits that we're seeing for 2025. And then the second numbers would be on the personal care margin exit rate. I know you had previously sort of called out targeting around a 10% targeted exit rate by the end of the year. Just curious on where you're standing at this point. Yeah. So on the PCS side, that's where we're going to be falling out at the end of the year. I do think the investments that we have made to appropriately ensure that we will have growth and margin expansion into 2025 were the right things to do. So again, it would be close to that level of 10% as we exit the year. But I couldn't be more proud of what that team has done. If I look at all the leading indicators across where we maybe had some softness, they're all moving in the right direction. So, I'm really encouraged about that business, one as we exit the year, but really as we go into next year. Because really for us, we have a common platform. We have standardization, which is unusual in that market because it's primarily made up of many different acquisitions and many small mom-and-pops. So yes, that was a lot of effort, but we really have done a lot of good work, and I feel good about the 2025. What was the first part of the first question? MA headwinds. Oh, MA headwinds. Yeah. RPM. Yeah. So yeah, that is for us, for the RPM world, MA is a challenge. And for us, we were concentrated within one large MA plan. And I expect the big reason for the kind of flatness in growth this year is directly related to MA. And I expect that to continue into 2025. However, because of what we've been doing both on the innovation side, but really, if you look at the Medicaid LTSS, that is going to continue to grow. And we are the largest there and have scale across the entire country. So I expect that growth will offset the headwinds that we have in the MA market. So you shouldn't see big changes, but we'll give you really more specifics in detail. But that's the macro. Our LTSS growth will offset the MA headwinds. Okay. Got it. And then my follow-up will be another two numbers questions. First would be if you can just size for us the CDPAP revs contribution in the PC business. I'm assuming there's probably not much EBITDA, but I don't want to make that assumption. And then on just sort of the fee-for-service, I know that you sort of framed like the 40% of the revenues relate to full-risk state contracts in NEMT. I'm just curious if you could sort of, I guess, sort of just ring-fence for us how much revenue you expect in terms of the revenue mix in NEMT will sort of flow into fee-for-service. So first question, just to remind, was CDPAP, revs, and EBITDA contribution in PCS. Second question was just around the fee-for-service mix of revenues in NEMT. Yeah. So for New York CDPAP, and we disclosed this I think last quarter, so the EBITDA impact, if it all went away, would be between $3 million and $5 million. So again, but we don't expect that, which is what we talked about. There's going to be a lot that's going to play out there, and we expect to participate in that, so higher than the EBITDA, but again, there's a lot to still unpack there on what happens in CDPAP, so again, the downside would be that it completely goes away, and that's a $3 million-$5 million EBITDA. Again, we don't expect that. We expect that we will be a part of that, as we said there, and if you look across, we've been in the New York market for a while, and there's a lot of business there. There's a lot of people there. We are not spooked by the short-term noise, and I do believe in-home care and specific in-home personal care for New York is going to be a valuable part of the healthcare ecosystem. And nobody's better to participate in that because of our large agency business as well as our ability to ensure that we can service anything around CDPAP as well. Again, that's a ways away when that all shakes out. And then with the fee-for-service component, again, that's where we're moving to in our shared risk contracts. Eventually, as we get through this, I think most of it will be fee-for-service. There's a couple of components within fee-for-service that we're doing and will likely have in place as well. So all of it, probably the right way to think about it is at the end of 2025. Again, a big chunk of that will be done before that. And again, this is why we have a lot of conviction around our cash flow coming out of the middle of 2025. But in general, all that will move to fee-for-service. So basically, just to simplify it, we should think about NEMT ultimately exiting '25 at sort of 60% fee-for-service relating to basically the managed care business, and then around 40% full risk relating to the state business. Is that a fair assumption? Yeah. Yeah. But I want to give one clarity on fee-for-service. And it kind of also is to the point of Pito's question where you kind of have an is there what's the competitive advantage? With some of our large payers, we're going to have, and this is what we want, kickers to do with cost and quality. So it's going to and I love that because we can perform on both of those. And then the second component, and this is primarily going to be how the MA world is going to work, but it's happening right now in Medicaid. All members are not created equal. And having insight and ability to service those members differently are critical to our plans. And I expect, and we're doing this right now in our contracts, we should get paid for that elevated service and quality. And so if I have it my way and I'm going to keep pushing for that, it would be fee-for-service with quality and cost kickers. And we'll give you more updates on that as we move through that. But that's likely how the fee-for-service contracts play out. Okay. Got it. Thanks. Thank you. And we'll take our next question from Miles Highsmith from Deutsche Bank. Please go ahead, Myles. Hey, good morning, guys. Thanks for taking my questions. Just a couple for me, just to follow on to the conversation around fee-for-service, 60% full risk, 40% kind of as we look at the end of the year. Can you talk to us about how much has already gone that way here in this recent quarter? And I guess I'm tying it back to the guidance revision back in September with some price concessions. Where are we in terms of incremental price concessions? Do we expect significant additional price concessions in connection with this moving to 60%? Or maybe you could frame that. And then my follow-up is on the receivables and contract receivables and payables. You've got 110 receivable, 47% payable at the end of the quarter. You made some comments around some of the moving parts there as we get into mid-year. Are you willing to make any comments around whether those contract receivables will be a use or source of cash either through the first half of the year or the full year 2025? Thanks. The move to fee-for-service in our numbers right now and in the near term, you won't see any material change in fee-for-service because we're still on the contracts that we have set for 2024. The fee-for-service revenue and related margin will start coming on in 2025 as we are renegotiating these contracts. Maybe underneath your question, we're in discussions with the majority of our revenue to move to fee-for-service. That's why I have a lot of conviction around that in 2025. It's not hitting our financial statements. It will hit in 2025. Then to your question around compression, and that's to I do expect that to be compression across the board. Again, it's the right thing to do. Again, we're able to manage that because of the quickness in getting the cash as well as the cost of it. We're really competitively advantaged to win there. And then the specific items that we talked about last quarter had to do with the surprise that a lot of our payers had, really in some of it in 2023 and their 2024 contracts. Those are where the lumpy price compressions have been given. And then for those specific companies that we've given that price compression in their 2024 contracts, the go-forward contracts after that are in line with the estimates that I talked about in the normal price compression, again, which we'll be able to manage through at the right level. So there's no need to kind of extrapolate or annualize these lumpy price compressions that we gave because those are isolated to the 2024 contracts. The go-forward is as I articulated. Great. Thank you. And any comments on the contract receivable payables? Yeah. Yeah. So fully, we give a lot of disclosure around this. We gave a lot of information around our collections and the timing of those collections, both on the receivable and the payable side. So the right way it will be through majority of that kind of lumpiness in the mid part of 2025. So the payables down and the ARs down and the related collections and settlements on that AR as we move to fee-for-service as well. Okay. Thank you very much. Thanks. Thank you. And next, we'll go to Michael Petusky from Barrington Research. Please go ahead, Michael. Thank you. you. Heath, I just want to clarify a lot going on here in terms of what you said. The 30% cash flow conversion, is that essentially what you're saying that is likely in terms of your EBITDA between now and mid-2025? Is that what was being communicated, or can you just clarify that? No. It's post that. Post. Okay. It's post. So the getting to the right conversion rate after midpoint of 2025. And underneath that, yeah, the fundamentals of our cost structure, the fundamentals of each of our businesses we feel great about. It really is the timing of when we finish off the rolloff of all these contracts. And that's the driver for the continued need for capital. The underperforming businesses are doing everything we wanted to and expected. So we got to get through this contract rolloff, and we have clarity now in alignment with our customers. So we feel good about that. Okay. And then just sort of following up on that. And then it seemed to say you seem to say that then it can improve over time. I guess sort of what's the upside if we're looking at 2026, 2027, and beyond? I mean, can you get to a 50%, 5-0 cash flow conversion, or can you just speak to where you think you can get to over time? Yeah. So deliver, right? Then we can get to that point. That's why it's such a priority. The businesses need to be competitively advantaged at scale and grow, and we feel great about that. So that will continue to happen. So that's going to happen. So then really to get to that 50% amount, we need to have less debt. And that's why we are committed to that. And that's why our dual strategy on ensuring that we can monetize one of these great assets to ensure that that happens is a top priority. Okay. And then in terms of what you guys talked about, Pennsylvania Rate Study, I mean, to me, a state engaging in a rate study to me sounds like something that'll take forever. But can you just comment on when you would guess action potentially could be taken? I mean, could that be in place by 2026? Yeah. So we were explicit about that because we're seeing lots of growth in the Pennsylvania market. And I do believe that the lower-cost solution for Pennsylvania is to have personal care services. So it makes a lot of sense for them to continue to grow that. And that's us as well as the entire industry, how we're educating Pennsylvania. You can see all around Pennsylvania that these other states are having rate increases because of that. So I'm optimistic that Pennsylvania will do that. The industry as a whole is around that. Predicting the timing, TBD, we're seeing engagement. We're seeing action. So we'll keep you up to date. I do think it will happen, but I'm not going to guess on when that actual quarter is going to be. Okay. And then just last quick question. The Matrix update you gave, obviously, it sounds like you feel good about what you guys are seeing in terms of the fundamentals. But it does seem like in terms of timing for monetization because of all that's going on in Medicare Advantage, that feels like it's been pushed out. I mean, is that a fair characterization versus your prior thoughts? Thanks. Yes, sir. Correct. All right. Thank you. Thanks, guys. Thank you. And we'll take our next question from Rishi Parekh from J.P. Morgan. Please go ahead, Rishi. Thanks for taking my question. There's a lot last year. Thank you for the free cash flow conversion post second half. But I just want to go back to the EBITDA number where you're to be up 10%. I know you're going to give us more information in fiscal 2025, but I guess it's a tough time trying to bridge myself to that 10% growth. I was hoping that you could help because you talked about fee-for-service, which we know are lower margins. You talked about make-ups. There might be some offsets with new wins. To me, revenue growth potential in 2025 could be in the low single digits. The rest of it is going to come through cost savings. Is that how we're supposed to think of it? Or can you just at least help us bridge from where we are today, at least from your guidance, to that 10% growth and the puts and takes between revenue and expenses? The first item, you're right, is the MA market and the headwinds that we have around that in membership reduction that's going to happen in NEMT, and then the membership reduction that's also going to happen in the monitoring area, so that is the headwind. But when I get back to the fundamentals of each business, because they're large at scale, the transformation that has happened ensures that we have the right peggings for the right cost structure across each of these, and you're seeing that, and then the competitive advantages and leading indicators that show that we're going to have growth and operational efficiency. All that, I couldn't be more proud of the team and seeing that happen in the numbers, and that's going to be the underpinning of ensuring that we have the right cost structure, so cost is going to be a continued component of that, but it's the right type of, which is automation, efficiency, working out the right stuff at the right time. That's what's going to be the big driver for us, and a lot of those underpinnings have been put in place, so that's a big part of what we will see contribute to our 10%. The other items are continued growth, right? The personal care and monitoring business is stable, recurring. I feel really good about that. Personal care, I really feel good about that with our new team that's there, but also our approach on business development, which hasn't been approached. I feel good about that. And NEMT as well. And this is why we were explicit in the script, and I've been talking about a lot. For us, it's to show this differentiation and to have high, strong customer relationships. And in the Medicaid side, you're seeing continued wins, continued growth. I expect expansion to happen there. I am personally involved with our sales group on many of these customers and clients, and we can show the differentiation. MA is where the challenge is, and that's where we're going to need to overcome. That 10% growth is based on continued growth and offsetting the challenges on MA, continued growth both in the other segments, and then the costs out. But again, those underpinnings of costs that are in place, we need to continue to execute, but we will. That's why we gave and reaffirmed that 10% growth margin. Okay. On the follow-up, in 2024, you had a bolus of renewals, which I think you said earlier that you renewed all of them, assuming at least a year. Just so we're aware, what should we expect from a model and RFP standpoint, whether it's a percentage of revenue to states for NEMT in 2025? I believe New Jersey is up for RFP. Timing, is this all within the summer? Just again, prepared on a forward basis, is that included in your 10%? Yeah, it is included in our 10%. We do expect on the state side within mobility, RFPs to come out with the normal cycle. When those come out, we feel really good about our ability to continue to win on those. As you know, in the state side, especially in the state side, innovation is important. High-quality service is important. Consistency is important. So we feel good about our ability to win those. And so even though they come out, any type of move, if other than we expect this also next year, that we will have net new opportunities in state wins. But even if we were to win one of those, they're not going to come on in 2025. So in general, think about any kind of action on the RFPs within 2025. Any change would not be impacted into 2026. That's in general. So that's what's happened on the state side. And again, on the Medicaid MCO side, I expect us to continue to win and grow there. And if I could squeeze one more in on the covenants, I know you talked about it earlier. Is the timing more once we have audited financials going to wait till we actually have migrated over to fee-for-service before you then try to figure out what the covenants are? No, it's not actually the financials at all. It really is us just ensuring that we have all the detail and information around what our forecasts are and expectations are to get to them. So that's where we're in the middle of showing the proof around everything I just talked about today and ensuring we get a long-term solution. This is not we just don't want a quarter solution or a two-quarter solution. We want a long-term solution, and we're just in the middle of that planning process and sharing process. But it is not a requirement to get the audit done. Thank you. Thank you. And that was our last question. I'd like to turn the floor back to Mr. Heath Sampson for closing remarks. Yeah. Thank you for participating in our call this morning and for your interest in ModivCare. Our updated investor presentation is posted on our website. If you want a follow-up call, please contact Kevin, our head of investor relations. We look forward to speaking to many of you over the coming days, weeks, months before we report our fourth quarter and full year 2024 results in February of next year. Thank you again. Have a great day, and operator, this concludes our call.